tv Charlie Rose Bloomberg April 11, 2014 8:00pm-9:01pm EDT
by saying what you hope to accomplish here in this meeting? >> there will be 188 representatives of the membership of the imf. pretty much the global economy is in washington for three days. we are at the point where the economy has turned the corner or is turning the corner of the great refresh -- the great recession. we know that everybody has more to do so they need to talk to each other to explain what more they are going to do, how it is going to impact their respective economy, and how it will affect the others economies. be one particular issue doubt hope we can address which is the reform of the imf and making sure that we find a way forward to strengthen the institution and to make sure the membership stay together, including with the leadership of the u.s. >> i assume the fact that there
are central bank people here, finance ministers here. part of the message that comes out of here is for the larger community, a political community, as well as an investment that exists outside of government and nongovernment organizations. where are we in terms of the global economic recovery? fromobal growth -- we gone 3 to 3.6 to probably 4%. there is progress. not strong enough but it is positive. it is turning the corner. the u.s. is doing reasonably well. is it willion deliver a 2.8% growth in 2014 which is not of potential. united states can do better than that it can certainly create more jobs. at least it is moving at a
reasonably good speed. the private sector is beginning to unleash and to return to investments and to grunt -- and to job creation. the eurozone is finally turning the corner as well. it is turning positive. it had been negative for a few years and it is now positive. the core of countries are not doing better -- are now doing better. germany is the best of the lot. the countries of the eurozone such as italy, greece are finally delivering positive growth results as well. if you look at the emerging market economy, they are slowing down a bit, but they are still proving at about five percent growth which is almost double the growth of the united states. the size of the
global economy, they are at 50% now. 50% of the global economy is in the hands of emerging markets and developing market economies. they grow at that five percent, they are all gaining traction, strength. >> they should play a larger role in the imf? >> that is one consequence. you are right. it also means their policy and the impact of the fed monetary policy matters, not just for themselves but for the global economy given the size they represent. >> we have had some tapering in the united states by the federal reserve. you have urged the central bankers in europe to do what? for quite a while, we have encouraged the european central bank to be very attentive to the
risk of sustained low inflation which we believe would be hurting growth, jobs, and not particularly helpful to the service of debt. sees very encouraged to that after having praised the imf last week. has indicatedio, that low inflation risk -- you would be prepare to take measures as appropriate and in due course and i trust his judgment to do the right thing. >> you seem to be saying to the world and to the global economy, let's make sure that we maintain low interest rates. >> we are saying that -- we fear that interest will remain low for longer than we think. >> than you think is necessary? >> and that everybody expects.
we have to be very attentive to the risks it creates on the very easyen you have financing. at the same time, growth picking up. nowm,could create, you konw spots on the market whether it is a little bit too much acceleration. >> the big question here and the big question for the united states and the big question for the global economy is how do you create growth? >> as a subset of that, a key consequence, how do you create jobs because you still have to have one million people looking for jobs in the world. that the president of the g-20, the australian president has decided to tackle with the astronomy and energy --
the australian energy. -- theillion president australian president has decided to modernize and improve global over the two percent next five years which would put everybody in a much better position. we did do that. we identified what should be done in terms of key structural reforms. in terms of normalization of monetary policy. in terms of rightly paced fiscal consolidation. that coordinated approach can deliver two percentage points more in five years. countries -- >> the global economy? one of those structural reforms are essential? >> they will differ by country by country spaces -- basis.
you have countries where unemployment has been almost structural. if it is structural than a reform is needed. you have countries with dual labor markets where the protected people under contract have the benefit of long-term employment. all the others are on fixed terms, limited terms. that is a dual employment that is not conducive to growth or to job creation. that is one set of reforms. it will apply to a country like spain which is undertaken that reform. it would apply to a country like south africa that has had endemic unemployment and to a few other european countries for sure. other structural reforms -- take two countries like brazil or india that have big bottlenecks. you want to create a big new retail system in india.
fine, but you need to have the infrastructure, warehousing, the way to take stock from where to areas.to the sales brazil is tackling this issue because they have the world cup and the olympic games. those bottlenecks have to be cleared and that is not so much in the structural reform, -- >> i read her recent piece by larry summers. >> that is good reading. about the ideang that the most important thing you can do today for growth is investment in infrastructure, not only because it will create some demand in the economy and jobs, but it helps the economy expand. you share that view with him? -- weon't think that is
have a one-size-fits-all solution and it will work. it is a bit more competition than that. it is on a per country basis. low costt there is financing still for the moment and given that the capital investments have been low over the course of the next five or six years when countries have really tightened their belts and forgot about investing in infrastructure, forgot about investing in capital. for some other the countries, those that can afford it, it is not a bad idea. the u.s. is one that could look at it. germany is one as well. one would think, germany? germany can invest in improving its electricity grid system. speaking of europe, has the imf taken a different attitude about the british economic
reform and its program of austerity so that you are not -- how should we say this? them?monishing >> we ever rise up for the u.k. significantly. it is a very high revision. it is a high projection. frankly, we are delighted that the u.k. is drawing at that speed, at that pace. --hope they can consolidate that growth going forward and make it three engines powered. for the moment it is driven by consumption. the u.k. has to export more. the u.k. has to invest more. i am sure they will be looking at this. the numbers are beginning to rise which is good.
>> two things of reform you talk about. one is women and what they add to the job force. i just saw the women in the world conference in new york. help us understand what more ideas to make sure that women are more involved in the workforce will do for the global economy. >> i will give you the example two countries. one is japan. the other one is korea. i could pick other examples but those two are critical because they have the same aging phenomenon. two societies where people are aging weather tolerance for immigration is not very high, and where they are short of women-powered force. the way to resolve this issue is
to make sure that women can join the job market. that they can access where they deserve to access which is high educatedhey are oas as their male colleagues. there is this cultural reluctance to accept the idea. i was really pleased to see that the prime minister and the president have it -- have decided to include women into the workforce. making sure they have access to facilities and day care centers. i was talking to the finance minister of japan who assured me it will be in the next appropriation in june and that many cities in japan are putting into place to facilitate that. it is going to make a significant change and we have numbers to document what were the result would be if women
were given same access as men to the job market. forhe economic growth rate japan is about 1.4% >> they could certainly do with a bit more. >> are they on the right track? >> they have planned on doing strategy.ree arrows they wanted to double the monetary amount. purchasing massively by the central bank of japan. it is showing results. the second arrow was to address the fiscal situation because they have a clear deficit and they need to have a base in which to raise revenue because revenue is not very high in japan. they just did that on april 1. they need to do more. i asked the question to the prime minister, what about the third arrow?
are the structural reforms underway? he showed me they are under way and that many of them won't be appropriated in the month of june. we are following that very carefully. >> you also talk here at this meeting about inequality. what can be done and what is the impact of it and what is the risk of it going forward. >> we are looking at peak -- income inequality because we believe it is critical. it is raising the point where it is really -- victor really have -- it could have a detrimental impact on the growth of economies in general. we have done to critical studies in my view because we're looking at this not from a political or ideological angle, we are just trying to understand the relationship and the correlation. is two studies are -- one
inequality, excessive inequality . the answer seems unambiguously yes. it is hurting sustainable growth. did -- we study which did which goes against conventional wisdom was is redistribution of policies it radically articulate -- if adequately articulated, is it a break on growth? everybody assumes for a long time if you do with distribution that people will not be attracted to producing more, earning more because the more is going to other people. >> they talk about when you raise minimum wage, is that going to have an impact on employment overall? atwe have looked
redistributive policies articulated around progressive taxation. more progressive taxation. more spending on education, health care to make sure people have equal opportunities rather than unequal opportunities. really clearly indicated that that level of this region, -- of distribution is supporting growth. >> you have also said that it is important to come to almost closure with respect to certainty on financial regulations. where are we? >> by the way, charlie, it is one of the very, very few issues where i am in agreement with the financial market players. they also want certainty.
why is certainty necessary? so that they know how much reserve a much keep, how much capital they must trade, what is the level of liquidity, and what will be the powers exercised by supervisors. they need to know where they are operating. we are three fourths of the way there. the job is not completed yet. pointsl, the trickiest are left for the last hour. theuld put in that category cross-border resolution regime. the resolution applicable to the very large financial institutions. the global financial institutions. i would put in their the
appropriate control and supervision of shadow banking which has significantly increased in the u.s. and china. i would also put in there real transparency and clear regulation and supervision of the derivative markets and the clearing system. >> do you believe that the isted states and dodd frank a movement in the right direction? legislation,ece of i don't want to say it is good yetad, but it is not implementable. there is still a lot of interpretation. >> it is voluminous. >> yes. the interpretation is going to be even bigger than the dodd
frank act. i'm not sure it is very broadly applied or understood. >> the may come back to the imf and increasing the membership and responsibilities and the agreement. where do we stand on those very important things about the 21st century? you hear more and more that if you have as large economy as china has or brazil -- >> it should have a large seat at the table. >> is that going to happen? 2010,was initiated in strongly pushed by all members and united states. agreed on a reform that is supposed to be completed in 2012. we are not there yet because the u.s. has not set a point. i am being very blunt because we have been cute about it for a while.
it has been because the united states is not satisfied. >> is there a difference between the executive branch and the legislative branch? >> there was a perennial difference, but for some di reason we have been the collateral damage of that difference. the united states is my biggest shareholder. -- chair holder. it exercises leadership oin situations -- in many situations and when it did historically, it was quite often helpful. now we are stuck. i very much hope that the leaders who were attending the meeting this week, prime willter's and presidents, be calling on the united states to do this.
there is proper representation of the membership so that china has the right seat at the table. brazil is duly represented. south africa has the right seat and so forth. and, the imf has secured long-term resources rather than who is askedemen to turn the tap. >> loan money when you have a fire. i am trained in the law as you are. i always thought that inflation was a bad thing. me there was ao conversation of inflation that i don't quite understand. what is it that we need to know about the impact of inflation on the global economy today? i regard you as highly red and trained in all sorts of matters.
to discount your economic understanding is an understatement. mine is probably not better than yours. >> i certainly hope so. [laughter] >> common sense sometimes is worth more. back to inflation. i think it was a few decades back, particularly when monetary flexible.ere declared a certain amount of inflation was determined as good and helpful. helpful for growth because if you know that it might be a bit more expensive tomorrow or next spend.it prompts you to to spend you buy clothes. you buy the car you want because it is one step for tomorrow.
shouldn't be too much of it because otherwise would one into a very disruptive scene. a certain degree of inflation is good which is why quite a few monetary systems are adopted either the objection of inflation or a target like the fed. some of them keep inflation so that it is under control but high enough so that it stimulates growth going forward. >> i also thought that low interest rates for good and that was good for a lot of reasons because what happened in the great recession in america is because of tight money. too tight money was not always a good thing. >> it is a question of measure and balance. obviously, inflation rates and interest rates go together and have to sort of balance out.
there was a trade-off between the two. >> what is the most surprising thing about the economy you've learned since you have been managing director of the imf? >> what i find amazing is how the situation can change. for five back only years ago, everybody was in this terrible, dreadful situation. everything was negative. everybody was downbeat. if you look now, we are only five years into it, some might say it is a terribly long time but the situation has changed incredibly. that the action individuals, policymakers, that players can exercise on the general situation that i find quite remarkable. it is not enough, too slow, not even. it is moving.
>> there is the impact of culture in terms of how a nation reacts to economic factors. it is so imbalance between the state and the private sector as factors in the economy. ukraine. do, me what the imf can will do, want to do. -- wants to do. whatever order you choose. [laughter] >> what we want to do is help. helpe country wants our and the country wants our help and the help of the international community. we are here to serve -- ukraine is a member. they are paying its reimbursement because we are in debt with the imap so we want to help. what have we done?
the moment we were called, we sent a team to the ground. they are crisis management experts. they know how to look under the skin of my country. they know how to look at the books and checked against the reality. they did all of that. they move into negotiation mode. we have now what we call an agreement between the ukrainian authorities to address of the key issues. the exchange rate, the fiscal consolidation, the structural reforms, the government reforms, all of that. now, ukraine has demonstrated its determination. there are a few things they have to do and i am very pleased they adopted in parliament a new per german law. -- a new preferment -- procur ement law. these are conditions. once they have satisfied the conditions, we will submit to
the board which includes everybody around the table, including russia, we will submit the program to give support to ukraine. $40 million and $18 billion over the course of two years. we are not going to give a big check the day after. it will be paid in installments as they progress along the lines of the program that they have adopted. >> of the imf will help design the reforms that are necessary in order to make this commitment? >> yes. >> when you look at that region, when you went there, what did you find? when your people went to the ground, what did they report back? the country went was in a situation of very serious crisis. downhillncy was going fast.
the reserves were being exhausted quickly. measures have to be taken right away. like let the exchange rate float. allow the adjustment. the fact that we were on the ground and we were moving along having a good dialogue gave a good signal to the investors and the markets. the situation is stabilized at a much lower level in terms of currency, but the reserves are also stabilized and we have managed to stabilize the outflow of capital that was happening at the time because of the very erratic and instable situation. >> speaking of the outflow of capital. do you see in russia with much talk about sanctions in outflow of capital that affects their expected gdp growth? >> we are seeing in outflow of capital. probably a bit lower than what
was mentioned in the press a couple of weeks ago. probably closer to 60 and $70 billion. at very significant amount in almost as much as the whole of last year. it is a signal that capital left a country. capital is coming back a little bit now. that is probably driven by expectations from russian-owned entities. they have be -- there have been changes affecting the russian economy and that is reflected by the positions of the central bank of russia. it is reflected by the revisions they themselves have volunteered concerning the growth. the capital outflow is another indication.
i think it is certainly an economic situation that authority should be looking carefully at. >> speaking of newspapers and headlines, the headline today is about grace and its bond offer -- is about greece and its bond offering. >> probably not that soon. >> oversubscribed? >> massively. >> they are in interest-rate that many people didn't think would be possible. >> i think the authorities themselves were hoping for something that eventually turned out much better in real life. encouragement. i find that the investors are looking at the country with a different assessment of the risk and with the hope that the country will continue to deliver on what it has to do. the job is not complete. we still have a lot to do and there are structural reforms that are not yet completed, but
it is heading in the right direction. >> finally, there is this. how long have you been managing director of the imf? >> july 4 will be three years. >> before that, you were in the private sector and had these really wonderful jobs. there islook around, much speculation about what you might do. >> i think they are all wrong. [laughter] >> thank you for joining us. managing director, christine lagarde. [applause] thank you very much. it was a pleasure to have you here. ♪
>> there are many, many world war ii stories and one of them belongs to eric lomax. he was a british soldier who was tortured by the japanese. he was forced to work on the thai-burma railway known as the "death railway." a japanese interpretor made lomax's life miserable. more than 50 years later, he returned to thailand to meet the man. in 1995, he wrote "the railway man." the autobiography has been
turned into a movie starring jeremy irvine and colin firth. here is the trailer for the film. >> i have a small problem which i suspect this gathering might find interesting. i've fallen in love. >> he's a wonderful man. i've seen it, but he's a mess. >> you couldn't possibly imagine what he's been through. >> i want to know what happened to eric. >> war leaves a mark. >> this is the bbc. allied forces in singapore have surrendered to the japanese. >> when we surrendered, the japs said we weren't men. real men would die of shame. >> you have no honor. >> you are here to help us. >> to build a railway. >> if you help, you will have a good war. >> but we said no.
we'll live to fight you. we'll live for revenge. >> he's alive? >> he's alive and i know where he is. >> he won't have a clue you are coming. >> this is what you're going to do, isn't it? >> i'm afraid the museum is closed. >> i'm surprised you don't recognize me. >> lomax. >> i am asking the questions. >> you answer. >> i did not expect you to be alive. >> what did they do to you? >> a lot of men went through something you can't imagine. you have to let us just cope with it. >> my husband isn't coping. i love him and i want him back. >> will you stand by him? whatever he does? >> i have to try.
>> i have suffered much, but i know you have suffered too and you mean everything to me. some time the hating has to stop. >> joining me now is jonathan teplitzky, the director. jeremy irvine who plays a young lomax. colin firth who plays the older lomax. and patti lomax, the wife of eric lomax, who is also the center of this story. i'm pleased to have them at this table. welcome. >> thank you. >> this is a love story. it really is. what a great -- tell us about the meeting when you first met eric lomax. >> well, excuse me, it was coincidence because eric was hoping to catch another train
that he missed. >> this is about what year? >> 1980. he caught my train and we met. i was on holiday traveling from the south of england to scotland. eric was very interesting, telling me about the history of the various towns. he had the most marvelous eyes. he obviously didn't take much care of himself, but he was a most interesting person. >> you had some correspondence and then got together? >> no. we met as in the film. a few tweaks here and there. then, we parted for some time. i rejoined him about a year later. >> very good.
he was suffering a lot from posttraumatic stress disorder. >> yes, he was. >> because of the experience he had had. is this film for you tough to watch? >> very because colin firth is so good in his part playing eric. occasionally, i forget who i'm watching. it gives me a jolt. it is an excellent film. it is a drama obviously. i'm amazed at how well the essence of eric's story and the truth is being kept. >> how did you come to this? >> i knew of the project for many years. it was developed for about 14 years. i have been on it for three or four. i knew the people involved.
for all sorts of the reasons, the original director couldn't do it and i was asked to step in. i read the script and the story of eric. it struck me immediately as sort of an almost portrait of a man in a succinct story that reminds us of what we are capable of as human beings, both the very best and very worst. just that as a starting point, fantastic material. i thought the themes of the film about reconciliation and forgiveness and in a sense, almost an antidote to revenge were important and very dramatic ideas to explore. >> he was a man who set out for revenge. -- for >> i think if you're going to try to address something as
difficult as forgiveness, moving beyond hatred, you have to be very careful. offering rees he -- easy remedies for life. we all think forgiveness is a good thing but if hollywood dreams up an optimistic notion -- depite all the pain, you too can achieve peace and then it would be almost offensive. to of heard it from somebody he and whoough every step had to confront a great deal himself then it has authority. i think that is the only thing that really authenticates the whole story. he did it at great cost. >> what was it necessary for you to capture in terms of the young eric lomax, prisoner of the japanese?
>> i was clutching at straws and away -- in a way. there is no way i could relate properly. i think someone for my generation it is virtually impossible. it meant doing things that i would have not normally done. the torture scenes especially, there is a sequence where we show a glimpse of the waterboarding. it wasn't a hard decision to make. we were going to do it for real as possible. i was so terrified with being possibly insulting to eric. was almost --ce was always going to be so difficult. there is one shot in the movie where we have the process going a little too long.
you see that glimpse of reality. i think those moments are so important. >> i think it is really important that you honor and the place -- that you honor the place of that era got to and to do that it was important to find that balance of what he actually gone through. it is very contextualized in the film but it has to make an audience understand that this man really went through something. hisind a place back to humanity. >> you knew that because of the dreams and nightmares he had. >> it shows what happens when posttraumatic stress is not faced. it never goes away. it affects the whole family. >> what happened to him? - hethe idea of seeing -
first realize the tormentor was alive, he was intent to go and kill him. why didn't he? because he realized it was another human being? >> i don't have an easy answer. covering half a century of suffering here. have a century between his captivity and that encounter. i think the film had to take some shortcuts because it is 90 minutes, not half a century. any answers i give on behalf of the character in the film are probably going to be simplistic compared to what patty would say . there was a correspondence in real-life. >> yes. at the same time, i wouldn't like to answer.
i think only eric could give a true answer. >> how did he find out his tormentor was to live? -- was still alive? >> he had been giving an envelope -- given an envelope by a friend of his very recently and eric took it out of this case and there was a cutting timeshe english language reviewing a book. there was a photograph of the young soldier accompanying this article. eric recognized him immediately. yes. >> eric is referenced in his book. this is the kind of coincidence -- you wouldn't believe it in a movie. eric finds this book and was sent to them because anyone thought this might of been his tormentor but because this man is a translator who might be able to help him find
information. he turns the page whenever -- and there- page 17 is a description of one particular prisoner who was stuck in his man's mind. he remembers the blue eyes. he remembers the prisoner screaming for his mother. in print beinglf written about by the man he was haunted by all those years. it was remarkable. people, i think, come to that conclusion having been driven by the pain and the desperate for revenge. somehow the greater wisdom to realize that if they do this they will be no different than him. >> from my point of view, having just focus on the first half of the story and not having to confront, i find him remarkable. eric didn't go through -- i
think it is very easy to look at it. i think this is what makes this story so fascinating. you find the very burst and very worst of human nature. we see the very best of it at the end. >> i do wonder if the if itlation of the pain, hadn't lasted so long, if he hadn't spent so long and consumed by the rage and pattiness, and then met and experienced love. the juxtaposition of these things and then later in life, that encounter maybe only could've happened then. not five years after the war. all of these things taught him something about where he got to. >> you both had a chance to meet
eric. how was that? >> it was an honor. youel like in this industry have a huge privilege to meet some of your heroes and people who you call us go to marry -- who you call extraordinary. i was very nervous. >> i was rather afraid of meeting eric. >> because? in the context in which we meet him, is beyond our country int -- our comprehension. there was a certain aura. our producer asked us to meet eric. i still haven't committed to the film and i was afraid to do it then. i knew meeting it would make it personal.
it is a great gift if you are playing a role, particularly if there are two of you trying to secure nice -- synchronize. you get it from the horses mouth. tti'save his aunt pa trust in us. you are being entrusted with something so precious. what eric went through in order to get this story out, what he went through in order to reach is conclusion of that book immense and very precious. it is not just precious because achieved, and patti it is also the fact he is representing a lot of men who have been silent on the subject.
and whole generation of people have bottled it up. he was the voice for them. to have it turned over to our form of interpretation. to say you have to do it in a 90 minute format with your limited understanding, your limited set of tools, it is in your hands to be true to it. to have the kurds to delve into it -- to have the courage to delve into it and be as rigorous as you can. and makes blessing. we met eric almost the same day, i think. the thing that struck me the most -- i read quite a bit -- was quite how eyes -- how his eyes were incredible. there was a twinkle there that you don't expect from somebody who lived through this. they rediscovered life and had a
great -- not only at peace with it but also moved on from the beers of life -- fears of life. that somethingnd fundamental about what it is to be alive. eyest these memorable blue . meeting him on the train, i get it. [laughter] eyes could be like a child or they could be so tough. if there were something he would've -- he didn't want to talk about or you went to a dark place, and they were like laser beams. >> he focused very directly on you when you were talking and when he was talking to you. you feel like you are in a spotlight.
as jeremy said, it was an honor to be -- to meet someone like that with such -- in such simple human terms. for them to share their story with us so magnanimously and openly -- the film started as an avid -- as an adaptation but became as much about the relationship and the discussions we had. it gave us an insight on what they were feeling at different times and the things that were going on in their head. aven quite simple things in sense given authenticity. >> regulations -- congratulations. to go back to the romance for one moment? -- was ite love at like love at first sight in the train? forgiveness, it